Construction workers gather at a construction site in Berlin, Germany, July 1, 2025. REUTERS/Lisi Niesner

FRANKFURT (Reuters) -German industrial production rose less than expected in September, increasing 1.3% over the previous month amid upticks in the car and electronics industries but tempered by a decline in mechanical engineering, the statistics office said Thursday.

Analysts polled by Reuters had predicted a 3% rise.

The output figure underscores muted economic activity in Europe's largest economy.

Industrial orders, an indicator of future output, on Wednesday registered a better-than-expected increase in September but a less volatile three-month comparison showed a 3% decline in the third quarter compared to the second quarter.

The government under Chancellor Friedrich Merz has initiated higher infrastructure spending, a package of tax breaks and lower electricity prices to support businesses.

Carsten Brzeski, head of macroeconomic analysis at ING, said the rebound was too weak to mark a structural turnaround.

"Even with some cyclical rebound in the making, structural weaknesses will put a lid on German industrial production for a while," Brzeski said.

(Reporting by Bernadette Hogg and Ludwig Burger, Editing by Friederike Heine and Miranda Murray)